Now that the 5% down conventional loan program is widely available (since November last year) I generally recommend using that as opposed to FHA because FHA comes with minimum property condition standards, the self-sufficiency test, and it's less attractive to sellers.

Personally, I like to run every deal through an easy back-of-the-napkin test before even pulling up an actual underwriting model. 

To do that, as long as you don't hit any of the standard tests (just google "material participation tests" to find the 7 tests), you are passive, and you can offset that income with your other passive losses.It will all come down to the nature of your involvement. 

Find a model that you can run the exact same test numbers through that you trust has accurate measurements of IRR. 

If you are doing a FHA loan on a 3-4 unit you will need to pass the sustainability test which can be a bit hard these days in Portland. 

This is a test of your risk tolerance. 

But now it seems taxes have increased, additional government fees, ie lead testing for any property built prior to 2017, and also increases in sewer / water rates.

Some lenders will underwrite off of the "Note Rate" and some will "Stress Test" the rate to a rate higher than the "Note Rate" which will give you even less leverage/lower DSCR. 5. 70% LTV on a 1.

I will remodel, furnish and test this model for approx. 6 mo.

However, identifying four or more properties means your exchange must also pass one of these two additional tests:1.